Housing market 'bottoming out'

26 May 2003
Stagnation in the property market in South East England may be spreading northwards, according to the latest house price survey.

Estate agents Hometrack, in its monthly survey published today, which collated data from 8,000 reports from more than 3,500 estate agents across England and Wales, found average house prices in Britain dropped 0.1 per cent in May, (the same as April) for the second consecutive month.

The average price stands at 135,200 pounds.

Comparing the 2.6 per cent rise in May 2002 with the latest data, Hometrack said it may review its forecast of 4 per cent house price inflation for 2003.

Hometrack said house prices falls in the South of England were beginning to level off though rises in the North were showing signs of 'easing.'

John Wriglesworth, an economist for Hometrack, said: 'While the stagnation is likely to persist over the next few months, there are clear signs the market is bottoming out.'

The heaviest falls were in Surrey with the average home price slipping 0.7 per cent to 246,800 pounds.

Properties in Staffordshire enjoyed the highest increases, rising 0.5 per cent to an average of 93,400 pounds.

Should the property market bottom out, the UK's enviable economic growth could be hit. Consumers aided the economy a great deal last year as they borrowed against the increasing value of their homes.

In 2003, UK growth was 0.2 per cent in Q1, substantially down on the growth rate of the previous three months.